US Accuses Apple, Publishers of Illegal Electronic Book Price-Fixing

Posted April 11th, 2012 at 1:55 pm (UTC-5)
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The U.S. is accusing the technology giant Apple corporation and book publishers of illegally fixing prices on electronic books, costing consumers millions of dollars in extra charges on their purchases.

The government filed suit in New York against Apple, the world's most valuable company, and two book publishers, while settling its claims against three other publishing houses connected to the lengthy investigation.

U.S. Attorney General Eric Holder said at a news conference in Washington that the lawsuit was aimed at “making sure e-books are as affordable as possible.” He said the government contends that “consumers paid millions more” than they should have had to when they bought new titles to read on their hand-held Apple iPad computers.

The dispute over the price of computerized books stems from the dominance in the U.S. marketplace of retailer Amazon, which has been offering best-selling books electronically for $9.99. But when Apple introduced its popular iPad tablet devices two years ago, the U.S. alleges that the firm colluded illegally with the publishers to create a new pricing model that raised costs for consumers and guaranteed Apple a 30 percent commission on each e-book it sold.

One of Holder's deputies, Sharis Pozen, said the executives “knew full well what they were doing” in discussing how to set prices. She said the scheme added $2 to $3 to the price of individual books.

Pozen said that at one point, the now deceased Apple founder, Steve Jobs, referred to the “wretched $9.99 price line” set by Amazon.

The government settled its case against the Hachette, HarperCollins and Simon & Schuster publishing houses. But Macmillan and Penguin Publishing remain as defendants.